Market participants, structural dysfunctions and the GameStop event
At least eight dimensions can be used qualify the way financial participants trade: Transaction speed from slow to quasi-instantaneous. Transaction rate from rare/infrequent to quasi-continuous. Selection of transactions from disorganized to very organized (e.g. backed by mathematics and research). Transaction's future obligations from no future obligations to with future obligations (e.g. backed by personal wealth). Time scope of transaction's obligation from immediate (e.g. transfer cash) to long term (e.g. payout bond coupon after 30y). Number of participants on "same side of transaction" from small to large Size of single transaction from small to large. Influence of fundamental/"real world" properties of traded contract from none to very important. In the context of the GameStop event we note the following: Traditionally, retail investors execute transactions: Slowly Infrequently In a disorganized way With no future obligation With only immediate obli...